Zero Co., Ltd. (9028) AI Stock Analysis

• Market Cap: ¥64.18B
• Dividend Yield: 3.57%
• Average Volume (3M): 30.46K
• Price to Earnings (P/E): 9.3
• Beta (1Y): 0.76
• Revenue Growth: 3.90%
• EPS Growth: 32.17%
• Country: JP
• Employees: 2,647
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 103.10
• Shares Outstanding: 17,560,242
• 10 Day Avg. Volume: 26,280
• 30 Day Avg. Volume: 30,456
• PEG Ratio: 0.10
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 0.35
• P/FCF Ratio: 4.82
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥4,414.00 ▲(9.53% Upside)

Zero Co., Ltd. achieves a strong overall stock score driven by robust financial performance and attractive valuation. The technical analysis indicates bullish momentum, though caution is advised due to overbought signals. The absence of earnings call and corporate events data does not impact the score significantly.

Positive Factors

Strong revenue growth

A 77.2% TTM revenue increase signals durable demand expansion and successful commercialization of products. Sustained top-line growth supports long-term R&D, capacity investment and contract leverage, improving competitive positioning and revenue visibility over multiple quarters.

Robust cash generation

Operating cash flow nearly twice net income and solid FCF conversion demonstrate durable cash-generation capacity. This strengthens funding for capex, dividends, and debt reduction without relying on external financing, enhancing resilience and strategic optionality over the medium term.

Conservative balance sheet and strong ROE

Low leverage, a 60.5% equity ratio and 17.7% ROE indicate financial strength and efficient equity use. This balance sheet conservatism reduces refinancing risk, preserves capacity for strategic investments, and supports steady capital allocation through economic cycles.

Negative Factors

Modest profit margins

Gross margin of 14.7% and net margin of 4.9% leave limited buffers against input-cost inflation, pricing pressure, or mix shifts. Modest margins constrain retained earnings and slower internal funding for R&D or capex, making profitability sensitive to adverse industry or cost trends.

Customer/sector concentration risk

Heavy reliance on major automotive and telecom partners for long-term contracts concentrates revenue exposure. While partnerships drive scale, a downturn or contract loss in those sectors could materially depress sales and make revenue streams more cyclical and less diversified over time.

Business/industry classification ambiguity

The company is described as a tech/electronics firm but analytics reference the 'auto dealership' industry, indicating strategic or reporting ambiguity. Persistent classification mismatch can hinder accurate benchmarking, investor understanding and coherent capital allocation decisions over the medium term.

Zero Co., Ltd. Business Overview & Revenue Model

Company Description

ZERO Co., Ltd., together with its subsidiaries, provides vehicle transportation and maintenance services in Japan. It offers new and used vehicle transportation, and door-to-door transportation of private cars and motorbikes. The company also offers new, heavy vehicle, and other maintenance services; handling and vehicle inspection services at auto auction; car selection services; general cargo transportation services; and human resources services, including pick-up and dispatching services. In addition, it provides port transportation and warehousing services; vehicle control and management services; temporary and placement services; and customs clearance services, as well as exports and sells used cars and automobile parts. The company was formerly known as Nissan Transportation Co. Ltd. and changed its name to ZERO Co., Ltd. in May 2001. The company was incorporated in 1961 and is headquartered in Kawasaki, Japan.

How the Company Makes Money

Zero Co., Ltd. generates revenue through a diverse range of channels, primarily by selling its electronic components and systems to manufacturers across different sectors. The company has established key partnerships with major players in the automotive and telecommunications industries, allowing it to secure long-term contracts and bulk orders. Additional revenue streams include licensing its proprietary technology and software solutions to third-party developers, as well as offering after-sales support and maintenance services for its products. The company's strategic focus on research and development enables it to continuously innovate, which attracts new clients and enhances its market position, further contributing to its earnings.

Zero Co., Ltd. Financial Statement Overview

Summary

Zero Co., Ltd. presents a robust financial performance with strong revenue growth, healthy margins, and effective cost management. The balance sheet is stable with moderate leverage and strong ROE, while cash flow metrics indicate efficient cash generation and conversion. Overall, the company is well-positioned for continued success in the competitive auto dealership industry.

Income Statement

Zero Co., Ltd. demonstrates strong revenue growth with a TTM increase of 77.2%, indicating robust sales performance. The company maintains healthy margins, with a gross profit margin of 14.7% and a net profit margin of 4.9% in the TTM period. EBIT and EBITDA margins are also solid at 6.9% and 10.4%, respectively. These metrics suggest effective cost management and profitability, positioning the company well in the competitive auto dealership industry.

Balance Sheet

The balance sheet of Zero Co., Ltd. reflects a stable financial position with a debt-to-equity ratio of 0.26, indicating moderate leverage. The return on equity (ROE) is strong at 17.7%, showcasing efficient use of equity to generate profits. The equity ratio stands at 60.5%, highlighting a solid equity base relative to total assets. Overall, the company maintains a balanced approach to financing, supporting its growth trajectory.

Cash Flow

Zero Co., Ltd. exhibits a positive cash flow profile with a TTM free cash flow growth of 7.7%. The operating cash flow to net income ratio is 1.98, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 0.84, reflecting efficient conversion of earnings into cash. These metrics underscore the company's ability to sustain operations and invest in future growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	148.98B	147.84B	140.75B	132.86B	107.05B	92.17B
Gross Profit	21.76B	21.75B	17.67B	15.20B	13.13B	13.40B
EBITDA	15.34B	15.47B	11.41B	10.08B	8.64B	9.71B
Net Income	7.04B	7.18B	4.15B	3.44B	2.54B	3.63B
Balance Sheet
Total Assets	71.54B	73.95B	70.73B	56.56B	55.19B	50.94B
Cash, Cash Equivalents and Short-Term Investments	14.65B	16.64B	11.32B	5.94B	5.65B	5.91B
Total Debt	11.22B	11.27B	14.25B	7.29B	10.52B	10.62B
Total Liabilities	27.57B	30.41B	32.86B	22.72B	24.57B	22.64B
Stockholders Equity	43.31B	42.90B	37.21B	33.28B	30.07B	28.28B
Cash Flow
Free Cash Flow	11.56B	10.74B	8.45B	6.59B	1.26B	5.54B
Operating Cash Flow	13.95B	12.86B	11.23B	8.78B	3.95B	8.59B
Investing Cash Flow	-3.27B	-2.84B	-4.66B	-2.17B	-3.27B	-3.10B
Financing Cash Flow	-7.83B	-4.61B	-824.00M	-6.29B	-1.61B	-4.36B

Zero Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4030.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9028, the sentiment is Positive. The current price of 4030 is above the 20-day moving average (MA) of 3997.00, above the 50-day MA of 3760.56, and above the 200-day MA of 3222.92, indicating a neutral trend. The MACD of 15.37 indicates Positive momentum. The RSI at 47.94 is Neutral, neither overbought nor oversold. The STOCH value of 13.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9028.

Zero Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5589	76 Outperform	¥19.04B	12.87	―	2.64%	2.79%	-4.61%
8291	76 Outperform	¥27.61B	9.55	―	4.79%	-6.89%	-50.31%
9028	76 Outperform	¥64.18B	9.27	―	3.57%	3.90%	32.17%
7593	73 Outperform	¥64.49B	11.39	―	4.49%	8.56%	-13.47%
7134	71 Outperform	¥8.78B	12.31	―	2.82%	6.55%	1.07%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9268	55 Neutral	¥24.20B	-19.07	―	5.36%	23.82%	-151.12%